finals week in college. You are saving me.... saving me
@nadineahmedelnaggar2946
6 жыл бұрын
same he's literally saving me
@extremeobservr1
6 жыл бұрын
Don't bunk
@huixinshen8613
5 жыл бұрын
Juan pedro Minaudo ????????
@yashrai6391
5 жыл бұрын
In India this is in class12 we r advance
@ErikPT
4 жыл бұрын
@@adamventura733 What high school did you go to? In my school, we only covered very basic economics that after we graduated we didn't even know what marginal utility per dollar or increasing return to scale was I use price elasticity of demand for everything now and I'm taking Macroeconomics in my 2nd year in college. Also props, Adam!
@nathanadler4024
5 ай бұрын
I am self studying macro and I have to say your videos are a phenomenal resource. thank you I will we be buying the ultimate review packet
@MoiNToi
7 жыл бұрын
THANK YOU SO MUCH FOR MAKING THESE VIDEOS. My professor sits in a chair at 8 AM lecture reading off his slides with a laser pointer. My final is this Friday and I'm just binging these videos - they're so well done and easy to understand. Thank you!!!!
@abbosbekkhudayberganov820
8 жыл бұрын
I HAVE HAD SEVERAL DIFFRENT PEOPLE EXPLAIN THIS EFFECT TO ME, NON SUCCEEDED IN TEACHING ME. I GREATLY THANK YOU FOR YOUR CLEAR AND UNDERSTANDABLE LECTURINGS!
@JacobAClifford
8 жыл бұрын
+Abbosbek khurderberganov You are very welcome
@VezeTech
4 жыл бұрын
I love this dude's content, 1. He is straight to the point 2. He has a sense of humor 3. He explains in normal english, not by text book terms
@nickyhummell
7 ай бұрын
words can not explain how grateful I am for this man
@nicollesalcedo7313
Жыл бұрын
I hope that more teachers teach as you do! You really make this world a better place
@axelpeta7296
6 жыл бұрын
Professor Clifford, you are really a genius! A master! The EconomicPedia! Fantastic! With you and the Crash C. I always learn a lot, and while having fun! Keep up the good work, please!!!! The best!!!
@camm4708
8 жыл бұрын
I have only just found your videos today, but they are extremely concise and informative. Please continue to make more videos!!!
@OSaine931
Жыл бұрын
I love this man a lot. He's a real lecturer. He is genius and funny. Amazing🥰🥰🥰🥰🥰
@spuddycactus2152
3 жыл бұрын
This guy is an actual legend
@brifjslaod6951
Жыл бұрын
my test is tomorrow and here I am cramming everythingggg
@OnkarabileLebeta-lq8ns
3 ай бұрын
Youre the Best, Love From South Africa.
@ryangraves538
6 жыл бұрын
Listen I have traded stock, stock options, and currencies (only a year on currency once refco went under and stole my 1000, it was losses anyway mostly but. I'm back in school taking macro. the kynesian chart my teacher used same ag demand shifts to left, equilibrium and price point 1 and 2 chart 100 times. My point is everyone this guy knows his stuff and smart enough while being creative also to get you to stay with him till you get it. I click on you first man if your available and at 44 years old just want to say thank you. I have my macro exam today, last one of the semester and need a calculator, will do my best without one. Bottom line, math wise, 20% of macro was obvious to me with 15 yrs cnbc viewership but mathwise was lost in class till you. Thank you, I might still get a D but I'm trying for a B and praying for a C. Wish me luck man. Teachers don't get enough credit how important they are, makes me want to be a teacher instead of a hedge fund mgr that is my dream.
@LADYSILVERWOLF028
Жыл бұрын
Thank you so much. If t lectures or textbooks were like your presentation, students would do a lot better. Your awesome!
@mariakarlagonzalezperez2880
8 жыл бұрын
Your videos have saved me in my class. My teacher puts them instead of teaching anything lol
@donx2341
5 жыл бұрын
Maria Karla Gonzalez smart! He explains it... clear
@maxastna5939
5 жыл бұрын
Same
@savannahu154
5 жыл бұрын
It's a great day to learn Economics! Your videos have saved me!
@nanayaaacheampongopoku
Жыл бұрын
Thank you so much Jacob Clifford you're the best.
@redcat7467
3 жыл бұрын
Finally someone talking economic things at a tolerable pace.
@ahmedmohamed-fo5jl
3 жыл бұрын
it is very kind to make the video available to download
@mrmasondo1838
8 жыл бұрын
Ur the best dude
@ileanamariemoreno1038
4 жыл бұрын
I read the book I read the teacher lectures I Google and this is soooo helpful to explain it without all those crazy words 🙃 Macroeconomics online **thanx coronavirus
@moisekazembe7894
3 жыл бұрын
So like you are the one i need for my class.
@invisiblegirl9736
3 жыл бұрын
You look great Mr. Clifford. You also look a lot like Mark Cuban. That is a compliment. 😀
@Imakilla4567
8 жыл бұрын
Great explanation! Thank you! I just have one question. Since the multiplier is 1/MPS, it would mean that the less money people tend to save would lead to a greater ripple effect. Does this mean that the government would actually encourage people to save less money? For example, if the MPS is 0.2, k would be 5 but if MPS = 0.01, k = 100. So saving 20x less money equals to a 20x increase in the multiplier. What are the economic implications when people do not save money? Or is it just something that happens since people have a fear of recession? And what if consumers (virtually) did not save any money (1/0.000000...1 --> approaches infinity )? So in an ideal word, if C = Yd, would the economy be amazing (In this example let's say U=Un and the unemployed citizens are paid out by the government while also having set future employment)? Of course, this would never happen due to economic uncertainty, since if people did not save any money and suddenly lost a job, they would have nothing. So going back to the government discouraging people to save, why would it not be a good idea for the government to say make a law that you can only save 1% of you spendable income while the government then saves a certain amount of their income in case of economic failure to then pay out to citizens in need when the economy goes into a recession. So this would be a sort of autonomous saving method by the government, saving a small percentage of tax income for future recessions. It might sound quite communistic or disadvantageous to the economy to suddenly make laws on saving but it's an interesting thought... Although, now that I think about it, the multiplier effect only has an effect on the economy when there are available, unused resources, meaning the economy is already in a recession. So would the multiplier even be able to promote economic growth since when the economy is at full employment we assume that there are no unused resources in the market, meaning the multiplier would be cancelled out by inflation? Sorry for the long, probably irrelevant comment, but these videos have actually got me thinking about the "what if's" instead of just studying the theory. Kind regards F
@Imakilla4567
8 жыл бұрын
Also, I know this isn't a video about law, but would the government be able to create a law that, for example, everyone has to save exactly 10% of your income per year and you are only allowed to use that saved income in a recession? Doesn't really make sense since you cannot force people to consume things they have no need for but how about a minimum of 10% of your income? Thanks!
@nayeemakhtar1
7 жыл бұрын
Imakilla4567 i like your thinking and thanks for sharing your idea
@F_15_AK47
4 жыл бұрын
Toward 2021 and still priceless
@damtewmekke2659
4 жыл бұрын
Is this the guy who discovered economics!amazing guy too smart
@grandadmiralthrawn9421
3 жыл бұрын
I think the money multiplier times the government spending is like the converging geometric series learnt in AP Calculus BC
@mariamm1373
3 жыл бұрын
ure literally godsent
@arinakuznetsova8595
2 жыл бұрын
THANK YOU! Just awesome!
@petengugi5813
8 жыл бұрын
just awesome. pure awesome
@jesuslovestoastyaya
8 жыл бұрын
Amazing video, thank you so much.
@hussainalsangees
5 жыл бұрын
Awsome channel and thanks for the info
@nishantthawrani364
8 жыл бұрын
Thanks for this! You're the man!
@finpreneursacademy
5 жыл бұрын
Excellent! 👍👍
@vedanthdinesh8024
3 жыл бұрын
Doubt: In the example you said increase by 20 billion and not increase to 20 billion?
@ericaampem2451
2 жыл бұрын
Thank you
@zeynepd647
7 жыл бұрын
you. are. amazing. thank you so much
@liamflynn9996
5 жыл бұрын
good job
@kiduaalute603
4 жыл бұрын
Tommorow I have. A test ALLAH bless you
@icarusshepherd1724
4 жыл бұрын
Who else is bored is quarantine and wanted to learn something cool
@chandlerfurman6579
3 жыл бұрын
is the simple spending multiplier and expenditure multiplier the same?
@wg5350
8 жыл бұрын
I'm a bit confused : what is the maximum multiplier effect? Let's pretend that people who found or got $100 would only save 1 cent, that would mean MPS=0.001, so the multiplier would be 1/0.001= 1000 ... that seems big to me, and I am also baffled when I think that this multiplier tends towards infinity (!) as the saving diminishes towards 0. Also, what if we are dealing with a population that does not even know the concept of saving and spends all the money right away...then MPS=0 , and we get an impossible division by 0 ?
@GRIMZz1000
8 жыл бұрын
what's the difference between mpc and apc, or mps and aps?
@flamedomegamer537
2 жыл бұрын
Can't find the practice video
@hanzalabutt5482
Жыл бұрын
I did not really understand, how is MPS .1 if MPC is .9?
@LuanSilva-ue1ch
8 жыл бұрын
How did you get 10 as the multiplier?
@whitneyjeffries5170
7 жыл бұрын
You've literally taught me more in the past 5 minutes than my teacher has for the past 3 months. You're a lifesaver!
@victoriapascarella3497
Жыл бұрын
i cannot agree more
@mariusceterchi5269
Ай бұрын
He taught you nonsense. Wealth means products and services, not money. If you don't belive that, adk yourself why is it that the more money there is in curculation, the less you can buy with them, or, in other words, the more useless it becomes. The "multiplier effect" is a nonsense concept used to justify government spendig, borowing, taxation, inflation ...which are all the things that make us poorer, not wealthyer.
@JacobAClifford
8 жыл бұрын
What did you think of the video? By the way, don't tell anyone that this week's Techinical Tuesday was uploaded on Wednesday. Shhh. Keep it a secret.
@abidmo3426
8 жыл бұрын
you make a lot more sense than my lecturer.
@amcghie7
8 жыл бұрын
+Abid Mo Yeah I wish I knew about these videos before my imminent exam. I had no clue what was going on in my lectures.
@tinaandkyle1996
7 жыл бұрын
You are a life saver in a college world of dull econ textbooks and flat lectures...Thank You
@uubeerdude
7 жыл бұрын
Nicely done. Any idea how much money the uber wealthy have hidden in hidey holes to avoid taxation, or for that matter do they save enough to otherwise remove money from the economy to the point that the multiplier is excessively diminished to a harmful degree?
@yashmehra8858
6 жыл бұрын
ACDCLeadership please make a video on paradox of thrift.
@apocalypse117
8 жыл бұрын
you're like the best econ teacher ever!
@JacobAClifford
8 жыл бұрын
+Anand Bindal Thanks Anand
@hemangchauhan2864
4 жыл бұрын
I wish our teachers also came to class with AC/DC belts
@ycompw
8 жыл бұрын
After i finished the video, i just re-watched the beginning. It's hilarious :'D
@Abby_J_20
4 жыл бұрын
The introduction is funny AND it makes sense. He says the multiplier effect 4 times then something else twice then only once... love it
@yeetmeat1356
3 жыл бұрын
Underrated comment, I don't think many people got that
@pedritogaby
Жыл бұрын
I don't understand how he got that 5 MPC
@tessayoung9756
7 жыл бұрын
Up at midnight cramming for my Macro Exam... SOOOOO glad I came across your videos! These are a life saver and they are making the info fun and interesting! I will be recommending them to all my friends who have yet to take the Micro course. Wish I had had time to get the practice booklet! Will definitely be adding my support!
@ictube7638
4 жыл бұрын
Not all hero’s wear capes. Some wear AC/DC belts
@shaheenkash421
2 жыл бұрын
i never comment on youtube videos but I just wanted to say that you're a really great teacher. I take IB economics, and your videos have helped me so much! I got a 7 in my macro econ test because of your videos thank you so much
@TheProgressiveParent
8 жыл бұрын
I like your fun upbeat delivery I think Hazlitt destroyed the concept of the keynesian multiplier in The Failure of the New Economics
@jenniferyu2828
5 жыл бұрын
damn watching this the night before my ap macro exam sir bless ur soul for making these videos literally saving my life considering i know nothing about economics or whatsoever before
@Stayready3458
5 жыл бұрын
Jennifer Yu OMG SAME
@farihaahmed942
4 жыл бұрын
Haha same now I'm watching before taking my macro exam online smhh #classof2020
@Mavia44
8 жыл бұрын
Mr Clifford you are best teacher of Econ I have ever seen ... Please could give lecture on " Neo-classical approach to aggregate supply "
@elon.2193
7 жыл бұрын
that basically means a classic vs keynesian view of aggregate supply. Discuss the points of difference between them.
@junkalunk
5 жыл бұрын
It’s helpful and considerate people like you that restore my faith in humanity and my grades. Thank you.
@Gmcmil720science
11 ай бұрын
This is why I think a ubi would be a fanominal idea. It could help so many people out of poverity, and with it as a safety net people would be willing to spend more. Thuse this would increase the rate at which people exchange money for goods. It would likely cost 3 trillion in the begining but could easly make that up and grow the over gdp in no time. Also people would feel more secure and as such willing to spend more making are econamy & workers more productive.
@matthewlanghorn9285
7 жыл бұрын
Last semester I had Microeconomics at Uni. Your videos are excellent. Everything I didn't understand, I understood after watching you. Used all your videos for revision. Thank you
@henryr315
8 жыл бұрын
Your teaching style was really helpful, thanks mate!
@ponmilebakare7010
Жыл бұрын
I love how you put jokes in your videos, it makes me remember easily. Your explanation is amazing and so are you.
@Hdjhrhdhryrhgrifhur
8 жыл бұрын
I have been in Macro class for over a month .. and don't understand a thing. I watch this video and feel 100% more confident, who needs lectures when I can watch your videos haha! Thanks so much :)
@JacobAClifford
8 жыл бұрын
+Tiana Nelson I'm glad I was able to help Tiana. You should check out my Ultimate Review Packet. I think you will like it.
@commaspace2196
7 жыл бұрын
Hi Jacob, this video really helped, thanks for making it! One question, does investment get factored into the MPC or the MPS? It seems to share properties with both groups, considering it comes out of the interest of having money in hand, but also to something other than the spender themselves.
@Cloud9_4712
2 жыл бұрын
Why do we multi wid 10?
@fiazanver4840
4 жыл бұрын
Pls Mr Jacob make Business studies vedioes tooooo😢
@theomannen75
2 жыл бұрын
Thank you for yet another fantastic video! Still (after 7yrs) highly valuable content.
@lorendeneen
8 жыл бұрын
SOOOO helpful ^_^ thank you. I agree. You make so much more sense than my professors and you even bring more enthusiasm _ which is definitely needed for this subject.
@JacobAClifford
8 жыл бұрын
+Lo Brown Thanks. Please make sure to subscribe and tell your friends:)
@IshavArora
3 жыл бұрын
I wish i had a great teacher like you. you are awesome man! Thank you so much for putting that much passion into this.
@Quinold
Жыл бұрын
I had to pause and write it down to fully understand but this helped a TON! Thank you for condensing so much info into one 5 minute video. I hope I'll be ready for my test tomorrow :)
@yinkagiwa415
5 жыл бұрын
ahhh the moronic world of Keynesian economics
@slavicnation5523
5 жыл бұрын
i feel ya pal, it gives me a stroke every time...
@MatthewGraham027
8 жыл бұрын
This really goes against common logic for me. I would like to get a response. From the math, the higher the MPC, the more money that is generated from an increase in spending. This essentially means that a society that has almost no propensity to save will be much wealthier than a society that saves much. However, I look at the Japanese society and their propensity to save as one of the reasons why the are so productive and a dominant force in the east for ages. Why is this? IMO, because I think that the propensity to consume is usually linked with bad decisions. When people save it usually is for something important - going to college, starting a business. However when people spend quickly, they usually do it for things that fade or are not the best, fast-food etc. I would agree that spending is just fine and creates a wealth (multiplier) effect if the propensity to consume was in-tandem with wise spending. However this seems to be completely backwards from personal experience and looking at the world at large. Propensity to consume seems much more like a propensity to waste. This might be my central problem with Keynesian economics at large.
@xiyang9726
5 жыл бұрын
Why am I watching this for Geography class... I feel like something is wrong
@062988932
8 жыл бұрын
for the money multiplier: how does one person spending money result in the money going back to another bank ? 4.00
@JacobAClifford
8 жыл бұрын
+Sam MacArthur Great question. There are sometimes what economists call "leakages" like when people save cash at home, but most money ends up back in banks and the finanical system. For example, if you buy a car, the car dealership might use that money to pay for a new sign and the sign guy might spend that money on somthing else, BUT, eventually that money will be saved by someone. And, it will likely be saved in a bank rather than in a cookie jar
@jean-pierrecayenne8561
5 жыл бұрын
Just amazing explanation.It's quick and clear at the same time.Keep it up
@AlextheLue
3 жыл бұрын
You are a legend! Studying for my Macro Final this Friday! You have saved my grade, thank you!
@WinterAlbiero
8 жыл бұрын
Wish I could have you in University. I'm currently in a Principles of Macroeconomics class and I have a final in a week, so I'm in full on review mode. Thanks for the videos, they really helped me this semester!
@moiraw207
2 жыл бұрын
Thank you for existing, you made something my professor explains in two hours so much easier to understand in five minutes.
@MrTugwit
6 жыл бұрын
ACDCLeadership, you're talking NONSENSE. Here are Keynes' original investment multiplier equations, [which any economist should know] with a $1 increment of investment: 1) ΔY = ΔC + ΔI 1 = 0 + 1 mpc = ΔC/ΔY = 0/1 = 0 2) ΔY = (1/(1-mpc)) ΔI 1 = (1/(1- 0 )) 1 An investment increment has a marginal propensity to consume of ZERO, so Keynes' multiplier equation gives the same result as equation 1. NO MULTPLIER. A consumption increment has a marginal propensity to consume of 1. ΔY = ΔC + ΔI + ΔNX + ΔG 1 = 1 + 0 + 0 + 0 mpc = ΔC/ΔY = 1/1 = 1 Any other spending type has a marginal propensity to consume of ZERO. ΔY = ΔC + ΔI + ΔNX + ΔG 3 = 0 + 1 + 1 + 1 mpc = ΔC/ΔY = 0/3 = 0 And Keynes' "multiplier" equation: ΔY = (1/(1-mpc)) ΔI shows that the investment increment [which he said the government spent]: (1-mpc) ΔY = ΔI IS the "saved" fraction. Both the consumed and saved fractions are spent as shown by equation 1. You're talking NONSENSE.
@katieshevchenko7221
8 жыл бұрын
Some people are just meant to teach! ;)
@MCOD1999UK
7 жыл бұрын
What happens if you decide to eat some money, instead of saving or spending it?
@Pizzalover12331
7 жыл бұрын
Then your Consuming it
@avavaviv1
7 жыл бұрын
Simple - canibalism
@772ggb
2 жыл бұрын
Hi Jacob Clifford, sorry but crazy idea here, if I can describe with an example: There are 30 workers at an insurance company. Their salary is doubled (let’s suppose from 5 to 10). Now, what could happen if: whatever small to medium service or product they pay for, from a doctor’s appointment to grocery products, they pay double or half more of what it’s worth. Would this be called a multiplier effect? Where would an economy like this lead the next beneficiaries and the next next beneficiaries? And let’s suppose a few more to more to a lot of companies or even a predetermined amount of companies apply this, may the result end in a growing economy of the lower or medium classes?
@TheProgressiveParent
8 жыл бұрын
I'm with the Austrians the saving creates growth by leading to capital investments, more stuff gets produced the price of that stuff comes down and then peoples wages are worth more. THe idea that spending creates growth has been an environmental disaster
@Untilitpases
7 жыл бұрын
Interesting. You can see it taking place in the oil-rich middle eastern countries and the Scandinavian social 0.1 style economy. (Granted, mostly that's hedging exposure) But the mere fact that capital investment *occurred* is testament to that. If spending created growth there would be no need for exposure diversification, or, Venezuela would still be the "swag" nation it used to be before collapsing. Although, somewhere there is a limit to the Austrian approach too. Take Japan with its policy of negative interest on deposits. Promoting saving works the moment that you've got an intra-country inflow of profit. i.e. to some extend you are allowed to save since another country is spending for your goods.
@aboucard93
6 жыл бұрын
You can’t just say you are with the Austrians as a rebuttal that’s not economics. You have to explain yourself. What part of an Increase in “G” (Government spending) won’t lead to an increase in “Y” (output) or GDP Within the the spending formula. That’s ALMOST like saying 2+2 doesn’t equal 4. Had you said an increase in G brings down national savings in the Long Run and dust leads to an increase in T (Taxes) that would have made more sense but don’t deny numerical facts with a weak rebuttal like “i am with the Austrians because that not economics as much as we would all like it to be that simple. Economics is mathematical soft science it requires empirical data. Economics professional will ever take you seriously unless you familiarize yourself with the terms and the facts
@joacom
6 жыл бұрын
Alex B, Keynesian multiplayer is proved BS. He just multiplies money printing money from the government. Don't you see on this very same video how one bill "is born" from another like magic? This only leads to inflation, as more people buying the same number of goods and services only generates an increase on general prices, and a decrease of the purchasing power of savings... that's why inflation is the hidden tax... did you really think you can create wealth just having the government to print money and spend more? Regarding the banking money multiplayer, same thing and principle, it is also a fraud, he considers the first initial deposit both a saving and as a spending, and on and on with the rest of the deposits. Suppose that the Reserve Requirement is 0 (this means a totally deregulated banking system, government says bank can loan all what's deposited). Do you really think the money would multiply to the infinity???? (as you divide by zero)
@vandergrift5557
4 жыл бұрын
Sir, your videos are blessings in disguise, so much informative and so clear to understand tnx a lot for all the time and effort you put into making these videos
@7172xyz
4 жыл бұрын
Mr.clifford you are and you'll always be my bestest teacher of economics.. 🤟😎I have seen no one till now, who has literally eased this subject "economics" to this extent... 👏👏👏😎
@thq7579
7 ай бұрын
2:34 Ok dude, then if we have an amount of gov, consoooomer debt + unfunded liabilities, say - 250 trils, an investment in gov project of $1 may result in such income, provided that: .000 000 000 000 004 is the mps and the rest is spent(aka consoooooooooomed)... 1/ .000 000 000 000 004 = $250 000 000 000 000
@brunopaskulin1355
8 ай бұрын
You are very didactic. There is just one problem though... It's important to explain that this model doesn't take one elementary aspect into account... The fact that for the government to be able to spend more, it has to obtain more money via taxation. The extra tax money being obtained by the government, in the hands of people could be used for other purposes which such people would deem necessary according to their own judgment of value. In a nutshell, governments don't produce and don't generate value... they need to "steal it" from someone so they can give it to others, which is a fundamental ethical dilemma. Edit: By Didactic, I meant in the good sense :)
@jranney1
8 жыл бұрын
All good except the tax multiplier is ALWAYS a negative number... Formula is -MPC/MPS = Mult(tax). A tax cut (a negative change) will have a positive effect on the economy. Hence, the must(tax) MUST be a negative number...
@JacobAClifford
8 жыл бұрын
+James Ranney You are totally right. I got caught up in absolute value. I will add a note in the description.
@hetaeramancer
2 жыл бұрын
well the idea is basically the same, you're just being mathematically technical in a very unnecessary way. it's like saying the acceleration due to gravity should be a negative number (-9.81) because it's pointing downwards, well guess what, i can legitimately say that the gravity is "9.81 pointing downwards."
@ayf7033
5 жыл бұрын
Wish me luck for Macroeconomics exam tomorrow ;)
@mfdumbasshuman
6 ай бұрын
You made me understand in 5mins what my professor has been struggling (and failing) to explain for a whole semester. Absolute legend. Keep rocking
@CR250RidR
6 жыл бұрын
I know I am stupid for asking this, but how does an initial 2 billion become 4 billion I don’t understand where all this new money is coming from? Is it just something I’m not seeing in the equation? Is it an extra 2 billion in debt? Or is it money that’s already in circulation on top of that initial 2 billion? I apologize for my stupidity
@NigelPK
8 жыл бұрын
Already knew the effect of the multiplier but I watched to compare. You are doing very well with the editing and your voice. Gained a sub ;)
@JacobAClifford
8 жыл бұрын
+Nigel PK Thanks Nigel. I appreciate it.
@joacom
6 жыл бұрын
Hey Jacob! Where does the government take the money to spend more from? Suppose it is a sound government with zero deficit nor surplus. How would increase spending? Would it raise taxes? What if the MPS is 0 (like in inflationary countries, where savings lose their value rapidly), does that mean that the government spending is multiplied to the infinity? That doesn't sound realistic. For what I see this only means that money and spending moves more rapidly, but I don't see any wealth creation around this... in fact, looks very risky on an inflation point of view. Money spent from the government in goods and services that were only bought for the sake of increasing spending, are goods and services that will not be available for the private sector, who would have voluntarily buy them for their genuine sake (for consumption or for investment).
@laninez7953
4 жыл бұрын
why is Simple spending multiplier = 1/MPS? I don't understand why? Also, is the point of the simple spending multiplier simply that if the government spends money, then that is good for the economy in that the output would be increased and that there is value in the government spending money on the economy? Would this also explain why during times like the Great Depression, the govt is incentivized to spend money?
@NaturesSymphony14
8 жыл бұрын
what if govt makes the investment of 40bn in infrastructure and if consumption of workers is higher than the income and then if MPC=2 and multiplier comes = -1 then it will effect GDP negatively?
@ericforteza8437
7 жыл бұрын
Can someone please help me out. So let's say the government spends $2 billion dollars, and the MPS is .1. The total would be $20 billion dollars. What would that $20 billion be considered?
3 жыл бұрын
This is Keynesian nonsense. For example, the money multiplier assumes that received money is either spent or saved the latter being leakage but that's not true. Savings are given to the bank which are immediately invested back into the economy. Saving money is just fine, in fact it promotes a stable economy and a stress free life. Government borrowing to increase GDP does quite the opposite.
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